Terence Rozier-Byrd Quoted by Private Equity Law Report on GP Commitments
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For its article “GP Commitments: LP Flexibility on Investment Size and Source of Funding Rests on Alignment (Part One of Two),” Private Equity Law Report quoted Akin Gump investment management partner Terence Rozier-Byrd on trends in GP commitment size and sourcing, which, it notes, is frequently a significant issue for investors.
Among the topics covered by Rozier-Byrd is the amount of the GP commitment. He notes that first-time funds’ GP commitment will likely be smaller compared to those of repeat players, which will more likely have greater liquidity and more funding sources to devote to their GP commitments.
Another variable in GP commitment size is asset class or strategy. Buyout funds, often larger in size, will frequently have larger GP commitments on a percentage basis, he noted, adding, “Historically, the typical GP commitment for buyout funds was 1‑2%. Now, the market is trending between 3‑5%.”
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